EUR/JPY Price Analysis: Eroding support at 120.25 area
|- EUR/JPY extends losses on risk aversion, to test 120.25 support.
- The yen rallied on fears of a second COVID-19 wave and geopolitical tensions.
- The euro has attempted a mild rebound although it remains far from day highs.
The euro has gone further south against the Japanese yen on Wednesday, extending its reversal from 122.14 lows to test a key support area at 120.25. Market concerns about the increase of coronavirus infections in the US and China and the growing geopolitical tensions in Asia have triggered a rush to safety that has strengthened safe havens like the yen.
Against this backdrop, the euro has depreciated about 1% over the last two days and is now hovering at 120.40 area, right above an important support level at 120.25 (June 12 low). Below here, bearish pressure on the euro might increase, leading the pair towards 119.43 (50% Fibonacci retracement of the May – June rally, and 118.50 (May 28 low, May 21 high)
The moderate improvement on market sentiment, with US equities indexes in green, has given some support to the pair although it still remains well below day highs. On the upside, immediate resistance lies at 121.24 (intra-day high), before June 16 high at 122.13, which is closing the path towards June‘s peak at 124.40.
EUR/JPY 4-hour chart
EUR/JPY key levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.